IRS issues new guidance on Roth rollovers

The IRS has issued Notice 2010-84 providing guidance under § 402A(c)(4) of the Internal Revenue Code, relating to rollovers from § 401(k) plans to designated Roth accounts in the same plan (“in-plan Roth rollovers”), as added by § 2112 of the Small Business Jobs Act of 2010 (“SBJA”), P.L. 111-240. The guidance in this notice also generally applies to rollovers from § 403(b) plans to designated Roth accounts in the same plan.

The guidance, in the form of 20 questions and answers, discusses what amounts are eligible for in-plan rollovers, plan loans, tax consequences of an in-plan rollover and specific issues regarding plan amendments.